Individual transferable quotas  policy in Canada

Introduction:

Canada is maritime country , its coastline is occupied three of world’s ocean border, the oceans and resources make a great contribution to its national economy. There are around 60,300 fishers and 30000 vessels. In 2009, the landing fish was accounted for 1.8 million tones and valued at $3 billions. There are some differences in fisheries dependence between vary regions, the degree on the Pacific coast is less than on the Atlantic. However, the fisheries still contribute greatly to the BC economy. The ocean and marine fisheries are the common property of Canadian, so the effective policies are necessarily to be set to management and regulate the fishing. The federal Department of Fisheries and Ocean is the government agency that manage the nation fisheries resources, including quotas allocation and decision-making on access .

Individual transferable quotas

Decades ago, there are many cutthroat competition between fishermen, the poorly competitive Fishermen usually were bullied by other competitors with bigger boat and better fishing. Therefore, the government implemented an individual transferable quotas policy to regulate fishing. There are two major aims for fishery policy to implemented in Canada. One is to protect the environmental friendly aquatic ecosystems. The other one is to ensure the equity of allocation in fishery resources.

Individual transferable quotas is one kind of catch share.Individual Transferable Quotas was implemented by the federal Department of Fisheries and Ocean In 1990. The government set a total catch allowable , and then divided to individuals. Each quotas holder will allocated by a proportion of total catching. It is usually calculate by total weigh in a given time, the total weigh of landing fish cannot exceed the regulated quotas. Holders can decide the time and the methods to fish. The quotas also can be trade in the market ,including both bought and sold.

Here I want to introduce one kind of fish under the ITQ system, it called Pacific halibut, which is a flatfish which inhabits the continental shelf of the United States and Canada. The weight of  halibut can reach 400 pounds, and it is very popular in the food market , because it is very delicious and it has few bones compared other fishes .Before the implement of IVQ, it was hard to estimate when TAC was reached, the fishermen often overload their vessels, which result in overharvest and depletion of the halibut resources. The quantity of vessels began to reduce after the introduction of IVQ, but the land fee has increased because fishermen can time their landing to match period of high market demand, which can also provide the high value fish to the market and meet the maximum profit.

In one article called A cautionary tale about ITQ fisheries, it mentioned that IVQ is not facilitate ownership but leasing. Many vessel owners sold their initial quotas and then earn their life without out fishing. The quota leasing of halibut, had increased from 13%  to 86% of TAC from the year 1993 to 2008 , which showed a high leasing level. The  leasing on  BC’s integrated groundfish fishery is aims to conservation. It promotes a cap-and-trade system, fishermen can trade the surplus quotas with each other in the limit of TAC.

The mechanism for quote trading

In terms of mechanism for quote trading, there are several mechanisms for effective quote trading including the fish quantity monitoring and discard reduction.

1. The establishment of pre-landing notification requirement.

2. Quantity check. There must have supervisors to weight the total catch , and confirm the poundage landing and catch size. Recent year, Canada set up a QS program to help organize this quantity inspection.

3.Quality inspections. Government set up regulations to grade the quality of fish, the quality of fish can be grade to three levels.

4. Impose Landing fee. Due to monitoring and enforcement activity will generate administrative cost, the government impose the landing fee to reduce financial burden. These landing fee was not only collected to offset partial cost, but also improve the supervision department.

5.Impose the Stringent fines of fishing privileges for violations.

Conclusion

1) its effectiveness in reducing catch

The ITQ is one part of TAC, it is the small shares divided  by the TAC . The total allowable catches is introduce to reduce the over-fishing, which makes a great contribution on sustainable development of environment and biological. The ITQ policy is recognized as an effective fish resource management methods to reduce catch and overcome overfishing and dumping problem.

2) its impact on discarding

Discarding is often driven by the economic and political factors.The discarding Due to quotas restriction, it may occurred to more discarding.  The fish which are usually unmarketable,  for example, when the quantity of fish are caught reach the maximum limits, the fishermen often discard some low value fish , or have to discard other rest of high value fish. Government in Canada found ban on discarding some species except some specifically authorized fish，like groundfish，it is illegal to desert grounfish , because this species has a low survival rates on release.

Many research proved that individual transferable quota will decrease the discard in single species fisheries, but not in multispecies fisheries.The individual transferable quotas are depend on shares of TAC in each species instead of their catching numbers, in this situation, fishermen use their  their quota share to catch some certain kinds of fish before they catch their share on other species.  It may result in discard on the some species fish caught before in order to catch more fishes in other species.

There are still some arguments  in the discarding. Some research found that the discard did not increase after the implementation of individual transferable quotas, the discards tends to decrease in many species, because the fishermen have more flexibility choices, they can choose how and when to fish, if they want to catch more fish in the certain species, they can buy more quotas in this kind of fish to cover the excessive  caught. Or they can also lease their quotas to other fishermen who need more quotas.

To conclude, the ITQ policy is a double-edged sword. On the positive side, the ITQ policy is implemented to reduce both overcapitalization and improve the market condition. However, on the negative side, the ITQ policy may also bring some problems, like some wholesales will have the monopoly control in the landing, or the increasing discards in multispecies fisheries. Overall, the ITQ policy grant the fishermen the right to assign their own shares in fishery. But it still need to be improved and has a long way to go.

 Reference.

1. http://worldoceanreview.com/en/wor-1/fisheries/fisheries-management/

2. Individual transferable quotas in fishery management, CRS report for Congress

3. Individual vessel quotas in the Halibut Fishery of BC

4. The influence of individual transferable quotas on discarding and fishing behavior in multispecies fisheries

Emission Trading in New Zealand

Emission trading is a market-based approach for achieving environmental objectives. A cap and trade emission trading scheme provides a limit on the greenhouse gas emitted, which will be greatly helpful to emission reduction. Since the climate change became a global problem, it brings numerous environmental problems, like global warming, melt of sea ice, rise of sea level，droughts and longer heat waves. Meanwhile, it results in a negative impact on all economic and society. Hence，an increasing number of countries implemented the emission trade policy to reduce the greenhouse gas emissions. New Zealand has obligations under the Kyoto Protocol, so the government began to implement an emissions trading policy  in 2008 to meet the obligation.

1. The coverage of the carbon policy

1.1 What sectors are covered？

Based on the Kyoto Protocol, the scheme firstly covered forestry , and was then expanded in 2010 to cover stationary energy, transport, liquid chemistry fuels and industrial processes. And six greenhouse gases are covered in this emission trading scheme:  CO₂, CH_4, N₂O_, HFCs (hydrofluorocarbons), PFCs (perfluoro carbons) and SF₆.

1.2 How does the policy implement over time？

The New Zealand Emission Unit Register was established in the end of 2007. The  NZEUR plays an significant role in record Kyoto emission units assigned to firms enrolled in the Ministry for the Environment’s Projects to cut down Emissions and Negotiated Greenhouse Agreements programmes.

The NZEUR not only can trade the emissions units in the domestic carbon market, but also allows to import the units from the international carbon market . There are some specifics carbon trade units called New Zealand Unit in the domestic market, which allows free allocate and no auctions in the short period. But there are some differences between different sectors in the free allocation of New Zealand Units. For example, the commercial fishery sector will receive the units in a free allocation on a historic basis. The forests sectors will receive a fixed free allocation of units. In terms of emission-intensive industry, it will be allowed on an output-intensity basis. It does not provide a limit on the quantity of units that to be allocated. The quantities that can be allocated to participants depend on the average level of output within a certain business transcation.

In 2010, forestry contributed approximately 20.5 metric tonnes of abatement in CO₂, which equals to almost 21% of total emission in 2008. For the individual business, the dates for they to comply with their duty to report emissions are vary. The stationary energy and industrial processes enrolled the NZEUR in July 2010, while the landfill operators entered in February 2013. The emissions emitted by agriculture will enter the NZEUR until January 2015.

1.3 Which sectors /carbon-equivalent emission are exempted?

According to the New Zealand Trading Scheme , government implemented a carbon policy that Negotiated Greenhouse Agreement(NGA) were available to eligible firms whose international competitiveness would be impaired by the carbon tax. However, the government decided not press ahead with the carbon tax regime in recent year. In this situation, NGA companies were to get a portion of exemption from the carbon tax and pay less in their direct produced emissions of greenhouse gases.

1.4 The cost-effectiveness of the policy

The carbon trade policy is provided to lower the cost in the emission reduction. The cost-effectiveness of the policy can be proved in several ways. Firstly, Carbon Trade Scheme not only provides the private industries with more flexibility required to cut down emissions of greenhouse gases, but also stimulate the companies to develop  the innovation in technology , both ways will beneficial to economic growth. Secondly, the carbon trading policy requires flexible trade between different eligible firms in the domestic market and international market. Thirdly, the Carbon trade Scheme will meet its environmental objective at lowest cost to the economy. For the sake of biggest profit, companies will consider to pay a most reasonable price for emitting CO2, cap-and-trade seeks out the most efficient reduction projects within the market, delivering a lowest cost outcome.

2. Distributional effects of the policy

According to an environmental report, the key factor in carbon trading system is the quota allocation. In prior to the quota allocation, first must carry on the total set. Total carbon trading system not only influence its environmental effect, but also strongly associated with the carbon price . Hence, it plays a significant role in passing the signal to the low carbon technology investors. Therefore, carbon emissions should be setted  lower than ‘usual emissions ‘ level.”

The trading scheme has several advantages compared to the tax scheme. Firstly, the trading scheme is more flexible, it allows the adjustment in price, while the tax is in the fixed level. The reduction in the emissions are much cheaper in some sector of economy, which will give a more profitable opportunities to those participants. Secondly, the trade scheme allows to trade in a cap-and-trade system between countries under the Kyoto. Thirdly, more methods are developed to support the carbon trading on the climate change policy.

However, It also has its negative sides. New Zealand would set up a market price for emissions under the carbon trade scheme, and that price would flow through the economy. In this situation, Producers would intend to reduce their emissions, and meanwhile, consumers would cut down their demand for emissions-intensive products, which would result in the product in a more expensive price. For example, New Zealand is a vast agricultural country, the prominence of agriculture occupied to almost 45% in the economy, the CH₄ from the ruminant animals and CO from the fertilizer are leading the emission profile. Since the livestock farming accounts for 50% of emissions, the emission would be reduced if cut down the quantities of livestock feeding. In this situation, it would earn a profit in the reduction of emission, however, the prices of livestock will be increased. Compared to other sectors, there are fewer choices for reducing biological agricultural emissions, but about 50% of emission derived from agriculture in New Zealand. Scientific research reveals that the New Zealand Emission Scheme has contributed to a decade years high in generating renewable energy. Compare to the years before 2010, it was witnessed a five-fold increase in the capacity of renewable energy. New Zealand have already produced a large percentage of its energy  from renewable sources, therefore, it has less abatement alternatives in the energy sector than other countries.

What a busy mid-term week !

At the end of this week, I suffered from a big loss and gained a negative return in -49% compare to last week -34%. When I opened the stocktrak website this morning, I was very down at the first time after seeing  my portfolio value, but then I comforted myself I just lost fuck money in a trading game and it is ending today. Investing in the future trading game is just like playing Roller Coaster, I sometimes found my mood fluctuations with the changing of portfolio value. Although I am not a winner in this game,  the future trading game still a rewarding learning experience for me.

From the beginning to now, my contracts focused on soybean oil, corn ,wheat , milk and wheat. Unfortunately, I lose a lot of value in soybean oil, corn and milk, and only gained a little in wheat and soybean.

A Lesson from my soybean oil and corn!!

As the saying goes, a single slip may cause lasting sorrow, 20 units of soybean oil and 20 units of corn laid the failure foundation for me from the beginning. I made these contracts without any market research and analysis, just trade as a risk lover, before making my decision, I should know 20x corn and 20x soybeans is equivalent to buying  about $450,000 of corn and $510,000 of Soybean oil. These total value occupied my 10%  original value, once these two item suffer from a big decrease, I will be wipe out from the stock market in the beginning, and unfortunately, it happened!!

From the first graph below, we can clearly see soybean oil fall rapidly in the last ten-day of a month, went up with some fluctuation in the beginning before decreasing at the end of October. I bought at $42.5 and ended at $40.73, I found myself in dilemma cause it was hard to make a decision in soybean oil after I buying , and I just waited and watched and did nothing in it, cause once I began cautious after lost a lot of money in the beginning,  I  prayed soybean oil would bring the dying back to life, but it disappointed me.

I bought corn at $4.61 and sold at $4.45 at the end of September, but it played a joke to me that it began to go up in the next two days, I really regretted my stupid impulsion. If my memory did not fail me, I just lose my patient to wait the US report and followed my intuition .

These two big loss taught me that impulse is the devil. It is important to weigh all options before making a decision, if you put the effort in up front it’ll pay off in the long ru

My feeling to the trading game

It was hard for me to describe my feeling to the trading game. From one side, it was interesting cause we can invest in the virtual stock market without any real money, in the meanwhile, we can learn both technical analysis and put our theory into practice. But from another side, our mountains of assignments always keep us away from the trade game, especially in these two weeks , it seemed that everyone paid more attention on the midterm review and just have little time to do analysis and trade in the stock market, some of us put it entirely out of mind. But as a whole, I enjoyed myself in this game although I made losing investment. I read news and charts before buying my items, and this was a good way for me to know more about the global agriculture market. Additionally, I learnt a lot of technical analysis, such as candlestick, K- line, MA forecast and so on. These useful knowledge will help me to invest in the real stock market in the long run. Besides the game, I am so much keen on to read others’ blogs, I gained so much in reading others’ blogs. Not only for their perceptual description, but rational analysis in stock market as well.

What I learn from the trading game

1. To weight the possible outcome before making your decision. For every option, list every possible outcome and label it as positive or negative.

2. Reminded calm attitude. Always remember that impulse is the devil .Stay calm no matter win or loss. Stock market is risky, and sometimes it is unpredictable, we should keep calm to do some analysis and make the next decision.

3. Know When To Sell Your Stocks. It seemed that greed is the nature. Many of us focuses on what and when to buy stock, yet few ever consider the best time to sell. Don’t let your stock gains disappear due to neglect. Before you get in, always know the specific conditions that will signal when it’s time to get out.

In the end, I want to say thank you to Mark, thank you for your patient guidance and encouragement.

Also, I want to say thank you to MFREers, I really learned a lot from you, the positive learning attitude, the rational analysis and awesome sharing.

The US Congress passes bill to end shutdown early Thursday morning. It seemed that many traders finished trade grains in the dark with no USDA report. In the news, U.S. stocks rose on Friday after investors cheered better-than-expected earnings, due to recovery the shutdown may have caused boosted share prices. I also optimistic in the grain stock market and still hold many of  my contracts in the long position.

My portfolio value this week (Friday) increased from –47% to-33%, even it was still a negative return, I was happy to see my portfolio value increase gradually, which means an increasing purchase power for me to invest in Future Game.

The main reason is  wheat. I kept 10 units Dec.2013 wheat in hand now, From the graph, wheat in this week witnessed an huge upward. From the news, we knew that Wheat prices soared to close above $7 a bushel for the first time in nearly four months, as a wet forecast for Brazil, and a weak estimate for the Argentina crop, compounded ideas of strong demand for US supplies. My regular strategy is short high and long low,  with my observation, wheat price will not keep go up in the long period, so I will keep an eye on wheat and short it in a suitable time.

Soybean oil

On October, soybean oil price witnessed an  increasing after an continuous downward in September. Soybean futures rose on speculation the harvest will slow because of cold, wet weather in central areas of the U.S., but soybean-oil futures in Chicago rose to the highest this month after U.S. inventories dropped. After selling 5 units soybean oil，I still have 15 contracts of soybean oil ，it is wise for me to keep them in my hand now，the soybean oil price will rebound in the near future.

I am a long term trading lover  cause the position mainly depends on the information and policy, but short term trading rely on the intuition and judgment. Short term trading in my mind ,is more risky and unpredictable due to the volatile nature of the stock market at times. Within the time frame of a day and a week many factors can have a major effect on a stock’s price.I think I am the person without sharp market instincts, so I cautious with my short position in the last few week.

But it seemed that short-term trading can be very risky, but also lucrative. I got some information from the website, and shared my study outcome here. As a short term trader, he or she must understand the risks and the rewards of each trade, not only know how to spot good short-term opportunities, but also must be able to protect themselves from un foreseen events. The most important one is to Recognize the Potential Candidates

Recognizing the right possible trade will mean that you know the difference between a good potential situation and the ones to avoid.

Step 1: Watch the Moving Averages
A moving average is the average price of a stock over a specific period of time. The most common time frames are 15, 20, 30, 50, 100 and 200 days. The overall idea is to show whether a stock is trending upward or downward.
Step 2: Understand Overall Cycles or Patterns
Generally, the markets trade in cycles, which makes it important to watch the calendar at particular times.
Step 3: Get a Sense of Market Trends

As a general rule in short term trading, you want to set your sell stop or buy stop within 10-15% of where you bought the stock or initiated the short. The basic idea here is to keep the losses manageable so that the gains can always be considerably more than any losses you may incur.

A busy week past away！！

Just remembered  some words How can you text the messages while driving? Honestly, I spent little time on trading and read  news this week, cause the heavy assignment kept me away from the Future Game, I felt myself like a clown who carried many balls at one time with lopping.

Now let us come back to the future game.

                                                         My portfolio summary

I won little in the beginning of this week but lose again in Friday  both because of soybean oil, the price of soybean oil rose little and the went down. It made a downward trend from the September,At the end of September ,Soybeans oil prices are breaking down domestically as new crop supplies and replenishing crusher needs. Favorable weather and a “clear-cut” recovery in soybeans  yields and output will probably result in price pressure. But I am not so sure whether the price of future soybean oil will affect by other factors and go up again, I didnot make a decision to sell it.

What happened recently？

Corn

Corn futures fell to a three-year low,corn futures for December delivery dropped 1.1 percent to close at $4.3325 a bushel at 1:15 p.m. on the Chicago Board of Trade. The EPA is reportedly ready to rule that the blend wall on U.S. gasoline consumption will act as a limit on future ethanol demand ,corn futures have slipped in response. I was tortured by the assignment and forgot to trade in the beginning of this week，I changed  my idea and did not buy corn after Wednesday so I lose little in corn cause I just kept 1 unit in hand after selling 20 units of corn last week.

Feeder-cattle

The downward trend of corn price remind me to pay attention on feeder-cattle. Because the grain is a main ingredient in livestock feed, the price of corn is the main factor” driving the feeder market, if the price of corn decreased，then the cost of feeder-cattle market will cut down. I searched the news and found that Feeder-cattle futures rose to a record as the falling price of corn increased profit prospects for U.S. ranchers who raise the animals before selling them to meat processors. Corn futures in Chicago have tumbled 37 percent this year, the biggest drop among the 24 commodities tracked by the Standard & Poor’s GSCI Spot Index. Cash prices for cattle were $3 to $5 higher than a week. So maybe I will keep an eye on both corn and feeded-cattle next week and decide wheher to purchase.

Future trading game is continue , although now I  am  a poor guy in this game cause I failure in investment and lose a lots of fake money, I made so much mistakes and I learnt a lot. Last Tuesday, Andrew told us some technical analysis, I was so interested in it, If possible, I think it will better for me to spend some time on learning  those useful analysis, which will helps me to make a more rational investment  rather than simple judge from some news.

In the end, good luck to everyone, both trading game and the mid-term, it seemed that we will have another busy week.

I gained  a huge negative return in corn from the beginning, so in the Monday, I sold all of the corn when I observed that corn slump and still continue a downward trend ,even I knew this is a huge risk, I lost a total 150000 after I clicked my button, and I  almost lose half of my value，which  annoying me the whole week and made me hesitate whether to invest in other items.

MY later decision

After losing a lot of money , I struggled to save my situation but my spirit is willing, my flesh is weak. My purchase power became weak and it means that I can only do some tiny trade.

Another 20 units of soybean oil I  brought in the first week seemed to be a big trouble to me，It was in an downward trend from the beginning and hard for me to make a forecast whether it would go up in this short period, I dared not sold all of them , cause it would cause  another serious losses . I am  But if I still kept all soybean oil in hand, it was difficult for me to made a deal in other items due to my poor purchase power.

I was not sure what will happen to soybean oil , so I sold  5 units of soybean oil . And then I shorted  several units in milk.

what I probably trade next week

corn

The chart witnesses a downward trend from the beginning of September, but it started to rose slightly in the beginning of October after a sudden slump at the end of September. It seemed that it was not a good decision for me to sell my corn in the Monday. Monday’s report showed more supplies than people thought, and yields are coming in better than expected, from the later news I learnt from that Corn for December delivery rose 0.3 percent to $4.4075 a bushel, heading for a 2.9 percent drop this week. Corn futures on the Chicago Board of Trade also edged up. From the trend and the recent news, we know that corn is in a  strong demand, and it probably will keep rising, so I decide to buy some corns next week.

soybean

Soybean witnessed a downward trend in September, but it began to rise in the beginning of October. From the news,Soybean harvesting was 11 percent complete in the main U.S. growing areas as of Sept. 29, trailing the five-year average, U.S. Department of Agriculture data show, In addition, China will continue to import  U.S. soybeans until South America crops are harvested and start moving into the export channel from March 2014. Soybean will continue to rise result from the huge demand, so I also decide to purchase some soybeans even I can just buy little.

What I learned from this week

Just as Mark mentioned, this is a great learning experience – there’s no better way to learn about the market than to participate, and lose some money. I now realized my stupid mistakes, I took too much risk in the beginning, 20x corn and 20x soybeans is equivalent to buying about $450,000 of corn and $510,000 of Soybean oil.  I know it is difficult for me to changeover my situation now, but now I become more cautious than before, I make each deal only after fully research.

So welcome back to week2 trading game!!

What is going on my portfolio value?

I still lose money thisweek，cause I invested too much in soybean oil and maize,
the price of both soybean oil and maize kept decreasing this week，I had a difficulty in choosing whether to sell or keepingobserve it , finally, I chose to do nothing cause I was no sure what will happening to these two items. But I began to contract wheat, I kept an eye on wheat from last week. So what happen on the increasing price of wheat? From a
report called Global wheat harvest to set record by a margin , we can get some useful information to this question. The International Grains Council raised by 4m tones to 676m its forecast for global wheat production, crediting “better than expected” crops in the European Union, Russia and the Ukraine.”[These] more than offset a lower forecast for Australia, where rains are still inadequate,” the council said in its monthly report on grains markets. The increase puts the IGC estimate in line with official US forecasts, and 30 million tones above the council’s projection for wheat consumption, despite the highest demand for feed wheat for 17 years. This year’s wheat harvest will break the production record by an even bigger margin than had been thought.

Here comes my conclusion: Wheat futures were up 1.9% Wednesday, trading around $670.5 per bushel. Wheat saw solid gains as indicators have turned positive with good export demand.  Wheat had bullish export sales of 620,200 tonnes for 2013-2014 marketing year.  Wheat was mostly 6-51 cents higher.so it is a wise choice for me to in

What happened in the grain market this week？

Compared to last week, Wheat futures were up 1.9% Wednesday, trading around $670.5 per bushel. Grain and soybean bids were slight to sharply lower with wheat trading higher.  Corn and soybeans were under pressure during the week as harvest is progressing for corn and just getting started for soybeans.  Soybeans rose, heading for the first quarterly gain in a year, as surging U.S. export sales signaled steady demand from China , the world’s biggest buyer and consumer. Early corn yields have come in been better than expected.  The basis levels continue to drop sharply in some locations on harvest pressure.

What I want to do next week？

1.I need to pay more attention on my previous investment in soybean oil and maize, and make a final decision on them.

2. To find out more resources to predict the trends before I do contract. Until now, My information source is still very limited，I frequently used  the website Bloomberg and CNBC General Market News ,to read some grain market  news and get some data before I make my decision, but I found this is not enough, cause the grain market is always changeable. I can not only judge a simple group data to draw my conclusion.  Additionally, I still not so familiar with some terms in stock market, like cover, I will try to use it next week.

3. To trade in the beginning of week, this week I was so busy to finish my assignment and left seldom time for me to do a research in the grain market, so I only contracted wheat (4 units) at Thursday. If I trade earlier, maybe I can make more profit to changeover my dilemma.

4. To make a detailed portfolio value table and keep an eye on the grain trend every day , I am pretty sure that if I reserve it as a real stock market investment instead of a future game, I will make every investment decision seriously and gain my profit. To conclude, no pain no gain, I should make more effort on it.

Wise investors always tell us that investment has certain risks, be wised with your decision.

Another similar story for me in investment

The Future trading game reminded me my first Fund buying experience three years ago. I received almost 10,000RMB lucky money in Chinese Spring Festival，there has a common value passed on from our ancestors is that always save your extra money for the rainy days.  It was obviously not a good choice for me to spent all my budget on shopping like buying a new phone or just saving them in my piggy bank. My dad gave me three investment suggestions: bank deposit, fund investment and stock investment. It seemed that high-risk means high return, bank deposit is the safest way but with a low profit and stock investment is the most profitable way but highest risk. It was the first time for me to arrange my money and I did not want to suffer a heavy loss in investment market. On second thought, I accepted the second one .Under my dad’s guidance, I putted several fund investment choices in a table to make a comparison according to their track record，recent net worth, net cumulative total growth rate, week, month ranking and so on. Finally, I invested 5000 RMB in a fund called Shining House. Paying close attention to observe the fund went up and fluctuate dropped everyday, my funds gained 4% one month later.  But after that, stock began crashed down and I lost more than I earned. This was an unsuccessful investment but it was the first time to set foot in investment market and learned few basic knowledge about it.

My  first trading experience in Future trading game
In terms of Future trading game, On 19^th September, I started trading with Grand &seeds stock without paying attention to the price and changes,  cause I am a newbie and still lacked of both knowledge and relative experience on  how to do business  in Future stocktrak market even thought I paid some time to watch videos to learn how to trade. I  felt like myself is just an Adventurer , the only way for me to make profit is just by fortune. But unluckily, both two stocks I invested made me lost money and ranked bottom among my competitors. I have bought 20 contracts in soybeans oil  and maize respectively，unfortunately, I lost total   11050 after 24 hours

.It is necessary for me to find out the reasons in this situation so that I can decide whether to continue  investing or stop investing in these items. For example, I looked up some information related to the price of soybeans oil in the website.

From the chart, it saw an obvious downward trend in the price of soybeans oil from April to September in this year. In a report Soybeans  oil end 41 lower lower，the economics North says “Soybeans oil prices are breaking down domestically as new crop supplies and replenishing crusher needs.  Additionally, the forecasted rain is seen as stabilizing and potentially increasing soybean yields in the northern production areasm” .

From my observation, Favorable weather and a “clear-cut” recovery in soybeans  yields and output will probably result in price pressure, with lows in September or October，the price soybeans oil is predicted to a continuous fall in the coming month，so I decide to invest in another grain item.

How to make a successful trading?

Before I made my decision to choose which items to buy next time, I will ask myself the following question:

1.My trading process focused on a long or short time frame?

2.Do my trading process recognize the market trend? Trading with the trend is a core strategy for futures traders.

To be a successful futures and options trader, it is necessary for we to assum a business risk with the hope of profiting from market fluctuations, such as analyzing situations, predicting outcomes, and putting your money on one side of a trade based on which way you think the market is going to go, up or down.

So, we need to make effort to become connected with the world through the Internet, television, and other news sources so you can be up-to-date regard to world events.

Everything is hard in the beginning. Although I am still a green hand in Future trading game, I prepared and ready to learn how this dynamic market works.My goal is to learn to make a diversified portfolio of futures contracts and not to end up losing my capital and leave poorer and disappointed.